FTX, which has filed for U.S. bankruptcy court protection, has said it owes its 50 biggest creditors nearly $3.1 billion.
"While the crypto world, as was demonstrated during last year's crypto winter and last week's FTX implosion is not at present large enough or interconnected enough with mainstream finance to threaten the stability of the financial system, its links with mainstream finance have been developing rapidly," Cunliffe said.
He added that FTX hadn't been large or interconnected enough to threaten financial stability, but that regulators shouldn't wait to put in place tighter controls.
"We should not wait until it is large and connected to develop the regulatory frameworks necessary to prevent a crypto shock that could have a much greater destabilising impact, " Cunliffe told a Warwick Business School event.
(Reporting by Marc Jones and Huw Jones)
